Shopping now made easier
By Donna MacMullin
Cha-ching! Shop-a-holics beware spending money just got easier.
First it was the credit card, then the debit card. Now it is the smart card, opening the door to a whole new world of cyber cash. It's a plastic revolution.
Major banks in two Ontario cities are currently involved in a pilot project to advance the use of electronic money. In Guelph, testing of the smart card, called Mondex, started last September. In December, Kingston saw the arrival of the Exact card.
"The smart card is intended to be a more convenient form of cash as opposed to bills and coins," said Don Gregg, general manager of Mondex for the Canadian Imperial Bank of Commerce. "Every transaction is a very fast, exact amount purchase."
Instead of a magnetic strip, the card is equipped with a microchip which stores money as a piece of information. "From a technology point of view the chip has enhanced security and it also lets us store more information," Gregg said. "In theory it is almost limitless because the computer chip in the card will continue to get more and more powerful just like our personal computers do at home."
Consumers will eventually be able to select what they store on the smart card. It is expected to have a capability to store data not only from credit and debit cards, but also store personal information like medical records and telephone numbers, Gregg said.
Also, the Mondex card has the capability of storing money in five different currencies. "It has a multi-currency capability. Although in Guelph for our pilot we only have a Canadian dollar capability," Gregg said.
Karen Blaine, manager of corporate marketing for the Bank of Montreal, is involved in the pilot for the Exact card in Kingston. She said there has been an enthusiastic response from consumers and expects the card will be distributed nationally in about a year.
The Exact card is geared towards the mainstream consumer as an alternative to cash for purchasing everyday items, Blaine said. "There is no transaction fee like debit and the service charge is less than a cup of coffee per month."
James Brown, president of Brown's Fine Foods in Kingston, which operates in cafeterias at Queen's University, said he hopes to see use of the Exact card at Queen's cash registers soon as it makes customer service more efficient.
To accept the smart card, retailers are equipped with devices similar to those now used for debit transactions. "We're finding that customers have their cards ready when they get to the cash so there's no fishing for change and they can get through lines lickety-split," Brown said.
Brown added his company also supplies vending machines and hopes to integrate a smart card device on these machines to encourage use among students.
Jim Hatch, a Western business professor and banking expert, said the notion of a microchip to store cash is the direction of the future. "I expect use will increase dramatically the more we become accustomed to plastic money," he said.
Considering the success of the debit card in Canada, with an estimated 83 million transactions in December, Gregg said he expects the smart card will be equally prosperous. "We really believe the success of debit demonstrates that Canadians will pick up a new technology that offers convenience we expect it will be very popular."